Apple Explores Switch from Intel Chips, Says Bloomberg

By Tiernan Ray

Shares of Intel (INTC) suddenly gave ground rather sharply toward the end of the session, closing unchanged at $21.84, and are down 9 cents in late trading, after Bloomberg‘s Adam Satariano and Peter Burrows and Ian King this afternoon reported that Apple (AAPL) is “exploring ways to replace Intel processors in its Mac personal computers with a version of the chip technology it uses in the iPhone and iPad,” citing three unnamed sources.

Apple designs its own microprocessors for the iPhone based on technology licensed from ARM Holdings (ARMH). The article quotes one source as suggesting that Apple could gain advantages in user experience across devices if it unified its efforts around its own chips. The authors note, too, that their information comes on the heels of last week’s management shakeup at Apple, part of which involved former head of engineering Bob Mansfield at Apple taking over a broader role that unifies all of Apple’s semiconductor and wireless efforts into one unit.

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There are 12 comments

NOVEMBER 5, 2012 4:18 P.M.

Anonymous wrote:

and the distortion field begins.

NOVEMBER 5, 2012 4:30 P.M.

david wrote:

This rumor won't die, and is only thrown out by wall street analysts that don't understand the technology. The whole desktop architecture does not lend itself to the ARM platform....and for significant performance and compatibility reasons, Apple won't do this. The only thing they may do is source an alternate x86 vendor like AMD.

NOVEMBER 5, 2012 4:31 P.M.

Dave Rensberger wrote:

Is there a contest to see who can write the most outlandish "piece" about how ARM processors are going to take over absolutely everything (including high-end servers and Macs/PCs)? Anyone who knows tech knows why this notion is fairly ridiculous and will take advantage of the irrationality that ensues.

NOVEMBER 5, 2012 4:36 P.M.

ArnoldLayne wrote:

I love being a winner in the stock market.
So, I bought 200 sh of INTC today.
My usual luck ;-(

NOVEMBER 5, 2012 4:37 P.M.

Thomas Wolf wrote:

I doubt this will happen - Apple's iPhone/iPad customers have totally different needs from those served by Apple's Intel-based offerings. The latter require maximum flexibility and performance with regards to the types of applications they run as they *create* content (vs. "consume" content). Macs are popular partially because they're able to run Windows and its millions of apps if necessary (through Bootcamp). If Apple switched from Intel, this would no longer be possible, except through emulation via VM software - which would make those apps run slower, of course.

Customers would, once again, scream because their favorite app has not yet been ported to the new chip (e.g. when the move from PowerPC to Intel happened) and they're forced to run those apps in emulation mode as well.

NOVEMBER 5, 2012 6:34 P.M.

Anonymous wrote:

Relaxed. Apple is exploring tactics to get a bigger discount from Intel.

NOVEMBER 5, 2012 7:32 P.M.

Chonito W Wilson wrote:

I do not get it from investment point of view. Intel has a solid roadmap moving forward. Next year Intel will release HSW which reduces significantly power consumption. Is there a gap on that power consumption with Apple needs? What are the Apple plans to get a chip with equal performance and power consumption than Intel's Haswell? Intel will switch to 14 nm chips one
year later. The power consumption will be reduced further with a die from 14 nm (and Haswell Arch). I have not see a roadmap from Apple, with chips manufactured with ARM architecture, at the node (whatever old process that TSMC may have). Apple has not mentioned what are the expectations with that chip. For all these reasons, bloomeberg must do a better job making a comparative analysis that help investment community. Honestly I just do not see it how Apple may deliver a chip that challenge Intel's coming offerings. If that is the case when that may happen and impact to Intel bottom line. My honest take: Either decision making at Cupertino is getting out of hand or Bloomerg is publishing just gossip without technical fundamentals behind. Either case is bad for investment decisions. Let's get serious, professional and do a better job publising technical details ( and timelines) that can help a better investment decision. It is easy to publish gossip. Difficult to publish a sound article. We expect more than just gossip. Actually these articles increase my concern with APPL rather than INTC. I will short APPL and continue long with INTC.

NOVEMBER 5, 2012 7:34 P.M.

Chonito W Wilson wrote:

I will short APPL and increase INTC. This non-sense continues. Technically it does not make sense

NOVEMBER 5, 2012 8:07 P.M.

Anonymous wrote:

Mr. Otellini should say “No Soup For You” to Mr Cook. Selling x86 CPU to Apple is at the expense of other PC makers (HP, Dell), and it’s hurting the PC ecosystem. It allows Apple to piggy-back ride by sourcing the PC components (mother board, memory) cheaply. Severing the tie with Apple will only benefit INTC in the long term. Or Cook should take a bolder action to use APPL’s cash to buy out INTC in whole.

NOVEMBER 6, 2012 5:56 A.M.

Anonymous wrote:

There's no secret that Apple is recruiting the best "Chip Heads" they can attract. And Apple is not the only group designing their own chips or what ARM chips can do. And regardless of what anyone's opinion is re what architecture does what. What is the future? It is there to be redefined. What is the ideal? What is not so impossible? What would give Apple a seismic advantage over more software, hardware and chip providers than what already exists? And what would ultimately be best for users and attract new users? Something to think about like what has generally been the unthinkable for whatever reason. Tech is about making the seemingly impossible possible. So cheers to Apple. All the best to them. I have to wonder if they will eventually buy up another chip maker... As for shorting the stock. Careful. They have money. And all it takes is one big idea and this thing will take off again. Apple is easily poised to do what most can't. Seeya.

NOVEMBER 6, 2012 11:54 A.M.

Anonymous wrote:

ok. listen - you can design your own chips. But you can't FAB THEM yourself.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.